Successfully activating a new distribution center (DC) requires a coordinated effort across a number of fronts. This is especially true for large, highly complex operations that manage a demanding service level.
A successful launch also depends on strategic preparation, including an ability to predict potential downfalls and adapt accordingly.
Before you begin operating your new distribution center, consider six common pitfalls that many companies – even the most well-designed facilities – fall victim to time and again:
Pitfall One: Insufficient resources. Many teams fail to organize enough resources to deliver against a project timeline, which typically ranges 18 to 24 months from inception to startup for a new facility. This is often a result of teams trying to cut costs, which in the end leaves them with limited resources and missed deadlines.
How to avoid it: Remember that your people will make or break your startup, so it is crucial to put them at the center of your strategy. Dedicate and provide your team with sufficient resources to complete the project within your decided timeline. By giving them the necessary level of resources to deliver, you might even find that you can accelerate this timeline.
Pitfall Two: Weak partnerships. Activating your facility may be an uphill battle if you do not have sound partnerships with local officials and providers of key services involved in the process, including systems development, the facility permitting and construction, or material handling equipment and design. Each of these players should be on your team and working with you through the complexities that are likely to arise in any DC launch.
How to avoid it: Build relationships and establish solid partnerships with representatives from these services from the very beginning. Keep everyone in the loop and apprised of the process to avoid miscommunication or unnecessary conflicts.
Pitfall Three: Poor integration of systems, equipment, and processes. Bringing a new facility online requires multiple phases of conceptual planning, detailed design, and coordination of the systems, equipment, and processes that will be used. Failure to consider the often-conflicting demands of each of these resources at a detailed level can result in failed operations.
How to avoid it: Plan, plan, design, design, and then plan and design some more. As you do so, be sure to consider each element of your systems, equipment, and processes. It’s also important to be nimble and account for any tradeoffs in each component’s design that could be made, if needed, and still allow the facility to operate efficiently.
Pitfall Four: Lack of timely communication. It’s critical to communicate with your team and other individuals involved in the project in a timely manner. This is a core value of proper project management, and without the right level of communication, your project could fail. There are always unexpected developments when launching a new DC, especially if your team is working against a demanding timeline.
How to avoid it: Elevate important issues to key decision makers in a timely manner to manage expectations and begin working toward resolutions as soon as possible.
Pitfall Five: Forgetting to test thoroughly. All new DCs go through a debugging and shakeout process. No center is created perfect, no matter how much planning and design you pour into the project. But some centers shortcut testing for the sake of staying on track with the timeline or trusting too much in a fail-proof design. However, without thorough testing, the critical debugging efforts are left to be done during live operations, where the cost of mistakes becomes even more expensive.
How to avoid it: Take the time to conduct a thorough, stepwise process for testing the facility at unit, system, and integrated operation level ahead of startup.
Pitfall Six: Overly aggressive transition approach. The approach of “sink or swim” may be the best way to get toddlers acclimated to the water, but it’s not the best approach for new operations. Rather than diving in all at once, it’s better to start off a new operation by simply dipping a toe in first. Taking on too much too fast can overwhelm operations management teams and cause DCs to fail.
How to avoid it: Give your DC a month or a season of limited demand to allow the management team to become familiar with the operation and make necessary refinements before taking on full demand.
Keep these six common pitfalls in mind as you’re designing your new DC. Avoiding them will not only save you time and money, it will keep your team on track and engaged.
Looking for more ways to make the most of your investment in a new distribution center? We’ve outlined nine questions that will help you build a solid foundation for your new startup and begin transforming your operations here.
